If demand is unit elastic and the labor supply is ________, the payroll tax is borne mostly by the employee.
A. unit elastic
B. very inelastic
C. very elastic
D. perfectly elastic
Answer: B
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Due to the existence of the FDIC, banks
A) have not changed their behavior even with the existence of insurance. B) are no longer concerned about net worth. C) become more cautious in making loans. D) may make riskier loans knowing that their depositors are insured.
In calculating price elasticity of demand, which of the following is assumed to be constant?
a. the price of the product itself b. the quantity demanded of the product c. total revenue received from the sale of the product d. the prices of all other products e. none of the above
A monopolistic competitor faces a horizontal demand curve
a. True b. False Indicate whether the statement is true or false
In the short run, there are large and persistent deviations between actual exchange rates and exchange rates predicted using purchasing power parity because of:
a. Discretionary fiscal policy. b. Widely different inflation rates in the two nations. c. Very different real GDP growth rates in the two nations. d. Many goods and services in the two nations' price indices are not traded internationally. e. All of the above.